According to just-released documents, in March the general counsel -- a non-partisan office of the FEC -- found that there was "reason to believe" that Ensign's parents had broken campaign finance law by giving the family of Ensign's former mistress and staffer $96,000 in April 2008.

That means the general counsel believed that a further investigation was warranted. In November, the full commission, which is made up of partisan commissioners, declined to do a further investigation and closed the matter. The FEC is not bound to follow the recommendations of its general counsel.

At the heart of the case is the intent of Ensign's parents. Was the $96,000 a gift to the Hampton family, or was it a severance payment for Cynthia Hampton, who worked for Ensign and with whom he had an affair? If it was severance, it would constitute an in-kind contribution to Ensign's political committees -- a contribution that was both way over the legal limit and unreported.

Ensign and his parents have denied that it was anything but a gift, citing a "pattern of generosity" that has included loans that were never repaid and private school tuition for the Hamptons' children. The Hamptons, however, have claimed that Ensign told Cynthia's husband, Doug, also a former staffer, that he would give Cynthia a $96,000 severance payment in a phone call just days before they got the checks.

"There is reason to believe that the payment the Ensigns made may have been severance instead of part of a pattern of giving to the Hamptons," the general counsel's report reads. "Further, any pattern of giving to the Hamptons appears to have been made by the Senator and his wife -- not the Senator's parents."

The counsel found that Doug Hampton's handwritten notes from that phone call are enough to warrant further investigation.

The FEC, however, disagreed. In its report closing the matter, the commission said that no further investigation was warranted because Ensign and his parents had already sworn that the payment was a gift.

Ensign has also been cleared by the Justice Department. The Senate Ethics Committee, however, is still investigating.